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Home » Ensuring Compliance: VAT Registration and Record Keeping in Germany

Ensuring Compliance: VAT Registration and Record Keeping in Germany

Germany, a European economic powerhouse, offers a profitable market for enterprises seeking to expand their reach. However, understanding the complexities of German tax legislation, particularly Value-Added Tax (VAT), can be challenging. This article provides a detailed reference for domestic and foreign firms looking to understand and navigate the German VAT registration procedure.

Understanding VAT in Germany.

VAT, a consumption tax based on the value added at each stage of production and distribution, is applicable to the majority of goods and services sold in the European Union (EU). In Germany, the typical VAT rate is 19%, with a 7% reduction for certain basic items and services such as groceries and newspapers.

When is VAT registration mandatory?

German VAT registration is not required for all enterprises. However, it becomes necessary if your company meets any of the following criteria:

Exceeds the VAT Threshold: Businesses with an annual revenue of €22,000 (subject to change) are required to register for VAT.

Intra-Community Supplies: enterprises that supply products or services to other VAT-registered enterprises in the EU must register for VAT, regardless of their turnover.

Voluntary Registration: Businesses that fall below the threshold might choose to register for VAT. This can benefit enterprises that primarily deal with VAT-registered businesses by allowing them to recoup input tax on purchases.

VAT Registration Process

The German VAT registration process can be roughly divided into three stages:

Preparation and Document Gathering

Identify the Responsible Tax Office: Foreign enterprises must register with the tax office in their country of residence. A list of designated tax offices is available on the Federal Central Tax Office website (

Compile the required documents. The relevant documentation usually include:

Company registration certificates (e.g., Articles of Association).

Proof of Foreign Tax Registration

Business Activity Plan in Germany

Power of attorney for a tax representative (optional, but preferred for international firms)

German Language Requirement: It is crucial to note that most forms and communications with tax officials are conducted in German. If German is not your business’s first language, consider hiring a translation or a tax counsel.

Application Submission

Application Methods: VAT registration applications can be filed online (only in German) or by mail using paper forms.

Online Application: The Federal Central Tax Office website provides an online application form ( This technique is faster and supports real-time processing status updates.

Paper Application Forms: You can download paper forms from your tax office’s website.

Processing Time: The processing time for VAT registration applications varies according to the intricacy of your business and the tax office’s workload. Expect a turnaround time of several weeks.


VAT Number Issuance: After successfully registering, the tax office will issue a unique German VAT identification number. This number must appear on invoices for taxable supplies.

VAT Return Filing: Once registered, firms must submit periodic VAT returns, usually on a monthly or quarterly basis. The frequency depends on your company’s VAT liabilities.

Record Keeping: Businesses must keep accurate records of all VAT-related transactions for at least ten years.

Additional Considerations for Foreign Businesses:

Foreign enterprises encounter several additional difficulties throughout the German VAT registration process:

Appointing a German tax representative is strongly advised for international enterprises. This person or firm serves as a liaison between your company and the German tax authorities, facilitating communication and assuring compliance.

Distance Selling Threshold: Businesses who offer items electronically or by mail order to German customers must meet a distance selling threshold of €100,000. If your firm surpasses this limit within a year, you must register for German VAT.

Seeking Professional Help.

German tax laws can be complicated, and the VAT registration process can be time-consuming. Consider working with a qualified tax advisor that specialises in German VAT to ensure a smooth and compliance registration process.


Understanding and negotiating the German VAT registration process is critical for firms seeking to trade in the German market. By being acquainted with the requirements, methods, and potential problems, you may assure a successful registration and avoid future compliance issues. Remember that this material is only a general overview; you should consult with a tax professional for particular advice tailored to your company’s unique circumstances.